NVIDIA has been a strong stock with potential for long-term investors, but its high valuation, trading nearly 40 times its forward earnings, presents risks. The company already sees significant future growth, making it challenging for the stock to continue generating high returns. Compared to NVIDIA, there are better investment opportunities in other industries like healthcare. AbbVie, for example, shows promise despite recent disappointing numbers due to the loss of exclusivity of its best-selling drug, Humira. The company’s innovative new drugs, Skyrizi and Rinvoq, have helped offset the revenue decline from Humira.
AbbVie has been investing in expanding its growth potential, acquiring companies like ImmunoGen and planning to purchase Cerevel Therapeutics. CEO Richard A. Gonzalez is optimistic about the company’s future and expects solid growth by 2025. Although AbbVie’s recent results may not impress growth-oriented investors, the company’s overall potential, coupled with a strong financial position generating over $68 billion in free cash flow in the past three years, makes it an attractive investment option.
With an attractive valuation trading at 15 times its estimated future earnings, AbbVie offers a dividend yield of 3.8%, well above the S&P 500 average. This, combined with its growth potential and strategic acquisitions, makes AbbVie a compelling stock to consider for long-term investors. Despite current modest gains in its share price, AbbVie has the potential to deliver strong returns over time.
In conclusion, AbbVie may not be included in the 10 best stocks identified by the Varied and Dumb Stock Advisor team, but its fundamental strength and growth prospects make it a promising investment. By investing in AbbVie now, investors could benefit from potential future growth and dividend payments. It is essential to consider AbbVie as a long-term investment opportunity, leveraging the company’s innovative products and strategic acquisitions to drive value for shareholders in the years to come.
*Note: This content is a summary of an article originally published by The Motley Fool.
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https://finance.yahoo.com/news/forget-nvidia-buy-magnificent-healthcare-121000086.html